A Chinese man living in the Queens area of New York has been sentenced to one day in jail and 5 years of supervised release equivalent to a 5-year probation period for his involvement in a bank mortgage fraud scheme and assisting in the purchase of a property that was later used for illegal marijuana cultivation. The 36-year-old Yongliang Deng pleaded guilty to the bank fraud conspiracy on January 21st this year. Federal Judge John A. Woodcock Jr. ordered Deng to continue repaying the mortgage on the property as compensation to the bank. If the property is sold in the future, the remaining mortgage must be paid off first.
As part of the plea agreement, two additional charges against Deng, including bank fraud and making false statements to federal law enforcement officers, were dropped by the prosecution.
According to court records, Deng obtained over $170,000 in residential mortgage from the Kennebec Savings Bank in Maine in January 2021 to purchase a property in Eddington. Deng represented to the bank that this would be his primary residence. However, he never lived in the house and instead rented it out for illegal marijuana activities.
Investigations revealed that Deng provided his personal information and government-issued identification to co-defendant Tony Liang, a 37-year-old resident of Brooklyn, who used this information to apply for the mortgage. Deng held the Eddington property in his own name, and Liang agreed to pay Deng monthly fees to have Deng listed as the owner of the property.
When questioned by federal law enforcement officers in May 2024, Deng admitted that the property was being used as an investment rental property and that he had never resided there.
Initially close to beginning his military service in the U.S. when arrested, Deng expressed remorse in court yesterday, stating his willingness to take responsibility for his actions, learn from the experience, and pursue a lawful path in the future.
Judge Woodcock noted that Deng himself was not involved in the illegal marijuana business, which was one of the reasons for the relatively lenient sentence imposed by the court.
Co-defendant Tony Liang, on the other hand, was charged with orchestrating the mortgage fraud scheme. Liang used Deng’s identity information to obtain over $500,000 in residential mortgages from two banks in Maine.
Liang and his associates used the funds to purchase three properties in Bucksport, Eddington, and Canaan, and falsified documents and information submitted to the banks during the loan application process, claiming the properties would be used as residences. However, all three properties were actually used for illegal marijuana cultivation or processing.
Liang admitted to maintaining a marijuana cultivation site at the Bucksport property. From January 2021 to February 2022, the house was used for growing and processing marijuana until operations were disrupted by a severe fire.
During the investigation of the fire by state firefighters, a large amount of growing materials, chemicals, high-power lighting equipment, hydroponic growing systems, burnt marijuana plants, and processed marijuana were found at the scene.
Liang has admitted to the related crimes but a sentencing date has not yet been scheduled.
In recent years, federal law enforcement agencies have been cracking down on illegal marijuana cultivation facilities in various locations in Maine. In January of this year, this publication also reported on two Chinese men from New York pleading guilty to similar charges in Maine. The cases involved a similar modus operandi: obtaining residential mortgages through false “owner-occupied” claims, then using the properties for illegal marijuana cultivation.